AUGUST 7, 2000

Coca-Cola rumors

THE world's best known brand - Coca-Cola - has never been actively-involved in Formula 1 sponsorship but there have been signs in recent months that this could change. We suggested last December that a new management team led by Australian Douglas Daft might reconsider the situation and according to reports in The Sun newspaper in London the company is planning to send executives to Budapest to watch the forthcoming Hungarian GP. According to the reports the company is considering an investment of around $50m a year. If this is the case, Coca-Cola could become one of the sports's biggest commercial sponsors alongside British American Tobacco ($75m) and Marlboro ($65m). The Sun suggested that the deal might be for the Benetton-Renault or Jordan teams. Jordan in unlikely as the team already has a full sponsorship portfolio for next year. Benetton is possible as the Mild Seven deal runs out at the end of the year and has yet to be extended. The team is currently selling its space very cheaply (with Marconi rumored to have paid only $6.5m for the sidepods when the going rate is around $20m). The team is expected to lose its backing from D2 Mannesmann and from Korean Air.

But while Benetton may seem an attractive idea it is hard to see how this would fit in with Renault's marketing ideas of having a Renault-branded car.

Coca-Cola sales have suffered in recent years as a result of increased competition in the soft drinks markets around the world. It has been forced to fight monopoly charges, the financial collapse in Asia and a damaging health scare in Belgium which led to the resignation of chief executive Douglas Ivester at the end of last year. The company owns a number of different brands, including Sprite, Minute Maid and Powerade and might decide to use Formula 1 to promote sales of these. Having said that, the company's biggest sponsorships in recent years have been with the Coca-Cola brand in the Olympic Games.

The obvious choice for Coca-Cola would be a deal with Ferrari. Coca-Cola would fit in with the Ferrari color scheme and the drinks company would benefit from an association with the most famous team in the sport. Marlboro is looking at reducing its involvement in the sport in the years ahead and even if it continues for another couple of years, there is potential for Coca-Cola, as Ferrari could easily rearrange its sponsorship to make room for Coca-Cola on the sidepods. Ferrari has long ago given up the myth that it does not have commercial sponsorships and Coca-Cola would look much more professional than the current "patchwork" arrangement with Shell, TicTac and FedEx.